Disputes on whether the rise in oil prices is caused by supply and demand fundamentals continued, with famous investor Wilbur Ross telling CNBC that the dramatic rise in the price is a bubble and there is no apparent problem with the supply of crude.

But the heads of major oil companies countered the statements that speculation was driving the price, saying supply was a problem.

Also keeping the market on edge is anticipation of two key economic gauge due out today: auto sales and the ISM's national reading on manufacturing.

Some good news started to trickle in the hard-hit financial sector, with Morgan Stanley recommending after the bell Mondaythat investorsbuy Lehman shares, setting a price target of $31. Lehman's stock fell nearly 11 percent in the previous session on rumors that it would be bought out well below its current price.

Also in the financial sector JPMorgan Chase reigned supreme across global debt and equity underwriting for the last quarter. JP Morgan underwrote over $147 billion dollars globally, but fell behind Citigroup in terms of fees, according to ThomsonReuters data.

Citi shares were off nearly 2 percent premarket to $16.45.

And in Europe, Swiss bank UBS, the continent's biggest casualty of the subprime crisis, introduced new corporate governance measures on Tuesday, including a clear separation of the responsibilities of the board of directors and executive management. But that wasn't enough for investors, as fears of more writedowns pushed shares down 6.9 percent in Switzerland.

In merger and acquisition news, Belgian brewer InBev continued its courtship for Anheuser-Busch , saying it held to its existing price of $65 per share in cash because it represented the full and fair value of the company despite weak stock markets.